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POLONIA BANCORP REPORTS RESULTS FOR
THE QUARTER ENDED
MARCH 31, 2007 AND ANNOUNCES
ANNUAL MEETING DATE
Huntingdon Valley, Pennsylvania - May 3, 2007. Polonia Bancorp (the "Company")
(OTCBB: PBCP), the holding company of Polonia Bank (the "Bank"), reported net
income of $71,000, or $.02 earnings per common share, for the quarter ended
March 31, 2007 versus a net loss of $167,000 for the quarter ended March 31,
2006. Higher net income for the quarter ended March 31, 2007 as compared to the
quarter ended March 31, 2006 was primarily due to higher noninterest income as a
result of lower losses on sales of investment securities and a recovery of a
prior period chargeoff partially offset by higher noninterest expenses.
Net interest income increased 3.8% to $1.18 million for the quarter ended March
31, 2007 from $1.13 million for the quarter ended March 31, 2006. Net interest
income increased for the quarter due to a higher average weighted rate earned on
investment securities and other interest earning assets and a higher average
balance of loans and other interest earning assets, partially offset by higher
interest expense paid on deposits. The increase in the higher average weighted
rate paid on deposits was primarily attributable to our new tiered signature
money market account.
The Bank recorded a recovery for loan losses of $225,000 as a result of
recoveries of $257,000 during the March 31, 2007 period. There was no provision
for loan losses recorded during the March 31, 2006 period. At March 31, 2007,
nonperforming loans totaled $226,000, or 0.19% of total loans, compared to
$267,000, or 0.28% of total loans, at March 31, 2006.
Noninterest income was $174,000 for the quarter ended March 31, 2007 compared to
$75,000 for the quarter ended March 31, 2006. The increase in noninterest income
was primarily due to the lack of losses on the sale of investment securities
during the 2007 quarter as compared to the prior year period, partially offset
by lower reported income attributable to bank-owned life insurance, lower
deposit-related fees and charges and the absence of gains on foreclosed real
estate sales which occurred in the 2006 quarter.
Noninterest expenses were $1.5 million for the quarter ended March 31, 2007
compared to $1.4 million for the quarter ended March 31, 2006. For the 2007
quarter, the increase of $100,000 primarily reflected higher costs associated
with compensation and employee benefits and professional fees related to
operating as a public company.
Total assets declined $7.8 million, or 3.8%, to $195.6 million at March 31, 2007
from $203.4 million at December 31, 2006. Contributing to the decrease in assets
were decreases of $13.0 million in cash and cash equivalents related to the
refund of $12.2 million in non-eligible stock subscriptions and a $1.2 million
decrease in investment securities primarily due to the repayment of
available-for-sale mortgage backed securities, partially offset by a $6.1
million increase in loans.
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Total liabilities were $171.1 million at March 31, 2007 compared to $191.6
million at December 31, 2006, a decline of $20.5 million or 10.7%. The decline
in liabilities was mainly due to a temporary increase in liabilities at December
31, 2006 from $24.8 million of stock subscription funds. With the closing of the
Company's stock offering on January 11, 2007, liabilities decreased primarily as
a result of the refund of $12.2 million in non-eligible stock subscriptions and
the transfer of $12.6 million in proceeds related to the Company's stock
offering to stockholder's equity, partially offset by a $4.2 million increase in
deposits.
Total stockholders' equity increased $12.7 million to $24.5 million at March 31,
2007 from $11.8 million at December 31, 2006. The increase in equity was
primarily related to the receipt of $12.6 million in net proceeds related to the
Company's stock offering.
The Company's annual meeting of stockholders will be held at 3993 Huntingdon
Pike, 3rd Floor, Huntingdon Valley, Pennsylvania on Tuesday, July 17, 2007 at
8:00 a.m.
Polonia Bancorp is the holding company for Polonia Bank. Established in 1923,
Polonia Bank is a community-oriented financial institution headquartered in
Huntingdon Valley, Pennsylvania. Through its five offices, the Bank offers
traditional financial services to consumers and businesses within its market
areas.
This release contains "forward-looking statements" that are based on assumptions
and may describe future plans, strategies and expectations of the Company. These
forward-looking statements are generally identified by the use of the words,
"believe," "expect," "intend," "anticipate," "estimate," "project" or similar
expressions. The Company's ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Factors that could have a
material adverse effect on the operations of the Company and its subsidiary
include, but are not limited to, changes in market interest rates, regional and
national economic conditions, legislative and regulatory changes, monetary and
fiscal policies of the United States government, including policies of the
United States Treasury and the Federal Reserve Board, the quality and
composition of the loan or investment portfolios, demand for loan products,
deposit flows, competition, demand for financial services in the Company's
market area, changes in the real estate market values in the Company's market
area, ability to operate new branch offices profitably, ability to effectively
and efficiently integrate acquisitions and changes in relevant accounting
principles and guideline. These risks and uncertainties should be considered in
evaluating any forward-looking statements and undue reliance should not be
placed on such statements. Except as required by applicable law or regulation,
the Company does not undertake, and specifically disclaims any obligation, to
release publicly the result of any revisions that may be made to any
forward-looking statements to reflect events or circumstances are the date of
the statements or to reflect the occurrence of anticipated or unanticipated
events.
Contact:
Paul D. Rutkowski
Chief Financial Officer and Treasurer
(215) 938-8800
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<Table>
<Caption>
SELECTED FINANCIAL CONDITION DATA
--------------------------------------
(Dollars In Thousands - Unaudited)
ASSETS 3/31/2007 12/31/2006
---------------- ----------------
Cash and Due from Banks 784 863
Interest-bearing Deposits with Other Institutions 18,148 31,003
Investment Securities Available for Sale 44,452 45,681
Loans Receivable (net of allowance for loan losses) 117,976 111,923
Bank-owned Life Insurance 4,001 3,981
Other Assets 10,226 9,923
---------------- ----------------
TOTAL ASSETS 195,587 203,374
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits 161,895 157,722
Borrowings 5,583 6,245
Other Liabilities 3,580 27,630
---------------- ----------------
TOTAL LIABILITIES 171,058 191,597
---------------- ----------------
STOCKHOLDERS' EQUITY 24,529 11,777
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 195,587 203,374
================ ================
</Table>
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<Table>
<Caption>
SELECTED OPERATING DATA
(Dollars In Thousands - Unaudited)
-----------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
3/31/2007 3/31/2006
------------------ ------------------
Interest and Dividend Income $ 2,509 $ 2,124
Interest Expense 1,332 991
------------------ ------------------
NET INTEREST AND DIVIDEND INCOME 1,177 1,133
================== ==================
Provision for Loan Losses (225) 0
------------------ ------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,402 1,133
------------------ ------------------
Noninterest Income 174 75
Noninterest Expense 1,477 1,372
------------------ ------------------
Income before Provision for Income Taxes 100 (164)
Provision for Income Taxes 29 3
------------------ ------------------
NET INCOME $ 71 $ (167)
================== ==================
Earnings Per Common Share
Basic $ 0.02 $ N/A
Diluted 0.02 N/A
Weighted-averaged Common Shares Outstanding
Basic 3,306,250 N/A
Diluted 3,306,250 N/A
</Table>
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<Table>
<Caption>
SELECTED FINANCIAL RATIOS
(Dollars In Thousands - Unaudited)
-------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
3/31/2007 3/31/2006
------------------ ------------------
Selected Performance Ratios: (1)
Return on average assets 0.15 % (0.39) %
Return on average equity 1.23 (5.62)
Interest rate spread 2.24 2.83
Net interest margin 2.58 2.87
Efficiency ratio (2) 109.33 113.58
Asset Quality Ratios:
Allowance for loan losses $ 727 $ 695
Allowance for loan losses as a percent - -
of total loans 0.62 0.71
Allowance for loan losses as a percent - -
of nonperforming loans 322 260
Nonperforming loans $ 226 $ 267
Nonperforming loans as a percent of
total loans 0.19 0.28
Nonperforming assets (3) $ 226 $ 267
Nonperforming assets as a percent of - -
total assets 0.12 0.16
</Table>
(1) Quarterly ratios have been annualized.
(2) Represents noninterest expenses divided by the sum of net interest and
dividend income and noninterest income.
(3) Nonperforming assets consist of nonperforming loans and real estate owned.